2024 Annual Wealth Outlook
Slow then grow: Investing in the markets’ big reset
As we enter 2024, we are faced with several conundrums as investors. Given how high interest rates are, how has the world economy avoided recession? Is a downturnimminent? With all of the geopolitical challenges, what should we consider when investing for the future?
Welcome to Wealth Outlook 2024: Citi Global Wealth’s annual report presents our assessment of the global economy and the potential opportunities that follow for the coming year and beyond.
CIO Perspectives ꟾ Week of 29th April 2024
Being Ready For The Unexpected
In the past 2 weeks, heightened geopolitical tensions became a market focus again. Investors were quickly jumping to conclusions after Iran launched missiles and drones at Israel on April 13. For investors having a knee-jerk reaction to the news, it has always been proven to be too late to be effective.
This week we discuss portfolios can be prepared for a less-than-ideal world.
Watch Now >
CIO Strategy Bulletin ꟾ Week of April 29th, 2024 By Citi Wealth Insights
Strategies For Equity Market Myopia
We believe earnings per share (EPS) for the S&P 500 may have risen nearly 10% in the year through 1Q 2024 rather than the reduced gain of 1.3% predicted by analysts who cut estimates sharply just ahead of results. While large cap tech and telecom services firms are expected to post large EPS gains in excess of 20% in 1Q, we expect a broadening of profit gains for other industry sectors in the next few quarters.
Only the future counts for determining the value of equities. A good quarter past will not matter for a firm that is closing its doors. Therefore, guidance on future quarters matters most, and some firms that have experienced a huge lift to estimates in the year past will struggle to keep exceeding expectations.
Weekly FX Focus ꟾ April 25th, 2024
AUDNZD – The Battle Of The Antipodeans
The AUDNZD cross remains resilient around the 1.0850-80 area due to the outperformance of the Australian economy. However, markets are pricing a higher terminal rate of 4.5% for the RBNZ by the end of H1 2025 compared to 3.75% for the RBA. Will the more attractive rates in NZD help to reverse the outperformance of AUD?
FX Perspectives | March 8th, 2024
A Continuation of Correlation Breakdowns
Markets see a busy week with 10 central bank meetings this week. Our Head of FX Strategy, Jai Tiwari brings our focus to 3 central bank meetings that markets highly anticipate.
2024 Annual Wealth Outlook
Slow then grow: Investing in the markets’ big reset
As we enter 2024, we are faced with several conundrums as investors. Given how high interest rates are, how has the world economy avoided recession? Is a downturnimminent? With all of the geopolitical challenges, what should we consider when investing for the future?
Welcome to Wealth Outlook 2024: Citi Global Wealth’s annual report presents our assessment of the global economy and the potential opportunities that follow for the coming year and beyond.
Global Strategy ꟾ Quadrant April 19, 2024
Farewell Goldilocks! See You Again Someday
Strong US labor market data, consumer spending and a global trade/manufacturing recovery are “good reasons” for resumed upward pressure on interest rates. In contrast, a “surprise” rebound in US inflation after a sharp slowing in 2023 is driving tighter financial conditions. (i.e., a stronger US dollar, higher bond yields and lower share prices together).
Inflation measures spiked in the first quarter for a third consecutive year. But more than mere seasonal distortions, data suggest some of the slowing in the US CPI was overstated in 2023.
The inflation news requires a reset of the Fed’s “confidence vigil” before it can commence in unwinding restrictive monetary policy. This pushes back the timing of any potential Fed easing step to July 2024 at the earliest in our view.
Sustainable Investing Spotlight
Planting for tomorrow: Weaving sustainability into the path toward food security
Rising global food insecurity has come under the spotlight following a series of geopolitical shocks, including the COVID-19 pandemic and Russia’s invasion of Ukraine. Food security concerns have also been compounded by the effects of a shifting climate and increasing evidence of damage caused by accelerating biodiversity loss and water scarcity. Amid concerns about immediate and long-term food security, agriculture policies are caught in the crossfire between short-term food security and sustainability.
World Investment Navigator – January 2024
- October 2023 price is gone, the opportunity remains.
- Markets still price in too high a probability of a March rate cut, in our view. Still, 150 bps of cuts expected in 12 months is not extreme.
- What has happened since OL24: Junk rally amid dovish Fed turn.
- How’s the broadening trade going?
- Health Care: the anti-obesity craze won’t stymie innovation.
- Yield curve is now very flat, and positively sloped between intermediate-to-long dated maturities.
- Intermediate IG still offer attractive “real” yields vs expected inflation with yields of about 5.15% for duration of about 4 years.
- USD: The recent squeeze up in DXY may partly be due to a rise in risk aversion related to the Middle East.
- Presidential Year Stock Market Returns.
- Market-cap vs Equal-weighted S&P 500 Over Time.
- China’s equity performance is uncorrelated with its GDP growth, while the property market has acted as a key source of wealth generation since 1997.
- Japan – Profitability, Investor Inflows, Currency Kicker.
Middle East Strategy ꟾ March 2024
Egypt | IMF Support + Policy Reforms = Economic Resurgence?
Egypt’s journey towards economic stabilisation and growth has been recently marked by significant developments, including a historic interest-rate hike by the Central Bank of Egypt (CBE), a currency floatation leading to a drastic devaluation of the Egyptian pound, and a much-needed $8 billion loan agreement with the International Monetary Fund (IMF). These measures, essential for meeting the IMF’s longstanding demands for economic reform, aim to attract foreign investment, manage inflation, and ultimately strengthen Egypt’s financial stability.
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Global Strategy ꟾ Quadrant April 19, 2024
Farewell Goldilocks! See You Again Someday
Strong US labor market data, consumer spending and a global trade/manufacturing recovery are “good reasons” for resumed upward pressure on interest rates. In contrast, a “surprise” rebound in US inflation after a sharp slowing in 2023 is driving tighter financial conditions. (i.e., a stronger US dollar, higher bond yields and lower share prices together).
Inflation measures spiked in the first quarter for a third consecutive year. But more than mere seasonal distortions, data suggest some of the slowing in the US CPI was overstated in 2023.
The inflation news requires a reset of the Fed’s “confidence vigil” before it can commence in unwinding restrictive monetary policy. This pushes back the timing of any potential Fed easing step to July 2024 at the earliest in our view.
Sustainable Investing Spotlight
Planting for tomorrow: Weaving sustainability into the path toward food security
Rising global food insecurity has come under the spotlight following a series of geopolitical shocks, including the COVID-19 pandemic and Russia’s invasion of Ukraine. Food security concerns have also been compounded by the effects of a shifting climate and increasing evidence of damage caused by accelerating biodiversity loss and water scarcity. Amid concerns about immediate and long-term food security, agriculture policies are caught in the crossfire between short-term food security and sustainability.
Disclaimer
This document is distributed in UAE by Citibank, N.A. UAE. Citibank N.A. UAE is licensed by UAE Securities and Commodities Authority (“SCA”) to undertake the financial activity as Promoter under license number 602003. Citibank N.A. UAE is registered with Central Bank of UAE under license numbers BSD/504/83 for Al Wasl Branch Dubai, 13/184/2019 for Mall of the Emirates Branch Dubai, BSD/2819/9 for Sharjah Branch, and BSD/692/83 for Abu Dhabi Branch.
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Warning: Past performance is not a reliable guide to future performance.
Warning: These figures are estimates / examples only. They are not a reliable guide to the future performance of this investment.